Health Care is Good Business

by: Laurie Thompson, Director of Programs, NADO Research Foundation and Zanetta Doyle, Digest Editor

The health care sector accounts for up to 15 percent of jobs in rural areas and hospitals, and are often the second largest employer in rural counties, according to the Rural Policy Research Institute (RUPRI). But, it appears the business of health care is far more effective and lucrative in urban than rural areas. According to the National Rural Development Partnership (NRDP), residents of rural counties generate about $66 million in health- related expenditures, yet only 50 percent is spent locally.

The disparity between rural, urban and suburban health care service is also evident in the quality of care provided. A report by the Department of Health and Human Services (HHS), Health, United States, 2001 with Urban and Rural Health Chartbook, reveals that suburban populations fare significantly better in many key health measures than those who live in the most rural and urban areas.

The inequity between urban and rural health care delivery is complex. Managed care programs are not as successful in rural areas because they are not able to secure the critical mass needed (about 300,000 people) to be viable. Medicare and Medicaid reimbursement rates are lower in rural areas, often resulting in reduced primary care services. Recruiting health care providers to rural areas is difficult because of lower wages and various quality of life factors. Rural employers are less likely to offer private health insurance, forcing their employees to wait longer before they seek care or to rely on emergency rooms as their primary care provider – increasing health care costs even more.

Regional Councils Link Health Care and Economic Development

Quality health care service delivery is critical to communities attracting and retaining businesses, or promoting their areas as potential retiree locations. Studies show that health care services are as important as schools when businesses and industries are considering location. Promoting health care services to recruit businesses and new residents complements the need to assure access to health care to current residents. As documented by the Agency for Healthcare Research and Quality, rural Americans tend to be older and in poorer health than their urban counterparts, and longer distances to providers often mean they receive care in a less timely fashion.

The Barren River Area Development District, an EDA funded district located in Bowling Green, Kentucky, made a major impact on the region’s health care system when they donated one of their old office buildings to the city. Today, the building houses a free clinic for local residents. It is funded through donations raised locally and staffed by volunteers.

Dorothy Darby-Paschall, Barren River Executive Director, explained that the clinic, in operation since 1993, serves uninsured, low-income residents in the community. Patients receive basic care, including physical, dental and eye exams, and prescription refills. Darby-Paschall noted that there is an economic impact of healthcare not only in her region, but nationwide. “There is a definite economic development impact of health care in most communities, regardless of size. In our community, the hospital is the number one employer, as it is in many small towns. When a hospital closes, there is an economic impact.”

HHS Taking Leadership Role on Rural Issues

In 2001, HHS established a Rural Task Force to assess programs, learn more about rural communities and determine how to use the information in program and policy development. The agency’s goal is to institutionalize and share the HHS model of including rural issues in policy/ program development with other federal agencies. HHS cooperates with various entities to gather information and create partnerships that help guide the department’s planning to ensure inclusion of rural citizens. Working closely with state, local and tribal governments, many HHS-funded services are provided at the local level by state, county or tribal agencies or through private sector grantees.

The Health Resources and Services Administration (HRSA), within HHS, is responsible for improving and expanding access to quality health care for all, especially those living in low income, uninsured, isolated populations. HRSA provides an array of programs including grants to rural providers aimed at expanding access to, coordinating, restraining the cost of, and improving the quality of essential health care in rural areas. Included are rural health outreach, network development and a special program to help improve the health of people who live in the Mississippi Delta region.

Within HHS, the Office of Rural Health Policy (ORHP) promotes state and local empowerment to meet rural health needs through the support of state offices of rural health. I t encourages the formation of state rural health associations and working with a variety of state agencies to improve rural health.

The Rural Health Research Center (RHRC) Program, which is administered by ORHP, HRSA and HHS, was initiated in 1988 to increase the amount of high quality, policy relevant and rural health services research conducted in the nation. The center studies critical concerns facing rural communities that seek to secure adequate, affordable, high quality health services. Research findings are used to educate national, state and local decision makers concerned with rural health issues, bridge gaps between policy and program needs, and to educate legislators and policymakers. The research center has also trained many health services researchers in rural issues.

For More Information: Visit the Rural Policy Research Institute at www.rupri.org; The Department of Health and Human Services at www.hhs.gov; Health Resources and Services Administration at www.hrsa.dhhs.gov; Federal Office of Rural Policy at www.ruralhealth.hrsa.gov; The National Rural Health Association at www.nrharural.org.

Dismal Diagnosis for Rural Health Care

Over 400 rural hospitals have closed since 1980.

Almost 20 percent of rural Americans were uninsured in the mid 1990s.

Less than 50 percent of rural residents had private health insurance in the mid 1990s.

Fewer than 50 percent of all hospitals are located in rural areas.

Medicare and Medicaid payments account for almost 80 percent of revenues for rural hospitals. Source: Rural Policy Research Institute, 1999.

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